EURGBP just bounced off the top of its long-term range visible on the daily time frame and seems to be gaining enough momentum for a test of support. Price broke below the middle of the range around the .7200 major psychological level and could head down to the .7000-.7050 region.
Stochastic is already indicating oversold conditions, which means that buying pressure could fade soon. RSI is starting to turn higher without even reaching the oversold area, suggesting a return in bullish pressure.
For now, the 100 SMA is below the 200 SMA but the moving averages are edging closer together, indicating the possibility of an upward crossover. If that happens, a bounce might be confirmed even before price hits the actual range support.
EURGBP Fundamental Factors
Euro zone inflation estimates came in better than expected for October, as the headline CPI printed a flat reading instead of the projected 0.1% drop while the core figure climbed back to 1.0%. This lowers the odds of further ECB easing, keeping the euro supported against its rivals.
As for the pound, industry PMI readings are lined up for this week and upbeat data could still render the British currency stronger than the euro, allowing EURGBP to dip until support. However, bleak data could spur an early bounce, possibly back to the range resistance at .7450-.7500.
Final PMI readings are lined up from the largest euro zone economies today, with any revisions likely to push euro pairs around.
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